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“Baseballs for Millionaires”

I know this is going to sound strange, what with the first Spring Training games starting and all, (I watched the whole White Sox v. D’Backs game today on MLB.TV,) but I need to address another issue. That being, the Rawlings Baseball Factory in Costa Rica. Now, don’t leave quite yet. Most people are probably thinking now, "I know, it’s terrible, those poor working conditions and the awful pay, how can we do that to people? It isn’t fair." Well, economics can go a long way in explaining exactly why this is actually good for the people of Costa Rica. First, this is based off an article that was linked from a comment in "The Baseball Collector" piece on his desire to visit the factory. In any case, I suggest you read the article, but if you don’t want to take part in the propaganda that’s fine as well.

The article says several discouraging thinks about the dangers of American industry and globalization in Costa Rica. For starters, get this:

The baseball workers typically make about $2,750 a year. A baseball player in the United States makes, on average, about $2,377,000, the Players Association says.

"It is hard work, and sometimes it messes up your hands, warps your fingers and hurts your shoulders," said Overly Monge, 37. Temperatures inside the factory can rise to 90 to 95 degrees, he said, and when they do, "we suffocate."

Wow. Imagine that. Now, let’s break this down. First, the wage comparison is invalid. The people making the baseballs make less than the guys jerking them out of the yard because, hey, they just don’t have the skill. If they did, I’m sure anyone would pay them $2,000,000 to do so. Also, don’t forget that the workers are making their money in Costa Rica, where wages are significantly lower. In fact, not that I’m endorsing a minimum wage (or ‘price floor,) but the people making the baseballs are actually making more than Costa Rica’s minimum wage.

Why work in the Rawlings Baseball Factory? Or, How can Rawlings find people to work in their awful factory?

Now, the workers are put under stress, the conditions are terrible, etc. So, why do they work there, if its so terrible?

Hard work, but far better than no work at all. Many of the coffee and sugar cane plantations around here have collapsed, done in by the forces of globalization. There is only one other factory in Turrialba, population 30,000. Without baseballs, Mr. Monge said, life here "would be more like Nicaragua," the poor neighbor to the north.

Warny Goméz, 33, worked for four years at Rawlings, put himself through college and became a primary school teacher. "People here have no choice but to work there," he said. "There are almost no other jobs."

So, it turns out that those that are working in the Rawlings plant are actually making what would be considered, in their country, ‘good’ money. If someone offered me a job where, in four years, I could put myself through college, I would probably take it. Now, it’s more complicated than that here – we have student loans, so that’s not really necessary, but you get the point. The Rawlings factory has enabled Mr. Goméz to go to college and teach others, where he is making more money and improving the education of those children in his country. Now, imagine if the Rawling’s factory didn’t exist in Costa Rica. There would be no way out for those who were stuck in the lower class of Turrialba, and no way for those who worked in the plant to better their lives and those of their children. The bottom line is this: workers are always working by choice. In order to keep the business running smoothly, the plant operator must make sure the employees are happy and healthy. If they are underpaid – meaning they can make more money at a similar job – they’ll leave and take that job. If not, they’ll stay. Simply put, the baseball makers at the Rawlings factory are working there because they want to. Finally, the author of the article leaves us with these wonderful words, after spending the whole time tearing Rawlings apart at the seams, if you will:

Despite their injuries, the two women say they liked the camaraderie and the atmosphere at the Rawlings plant. "I can’t complain about the work environment," Ms. Alezondo said. "The ventilation improved over the years," even if the pay did not. There was time to make small talk and good friends.

So, it seems the working conditions aren’t even that awful after all. It’s important to realize that if these factory workers know what baseball players are making in the US, (something mentioned earlier in the article,) they probably know what working conditions are in the US as well. They probably know that their own conditions don’t measure up, and they’ve probably seen Angelina Jolie and Oprah Winfrey do their number with the sweat shops in Asia. Not certain, but a pretty good bet. It’s possible that, while the working conditions certainly aren’t great, the workers aren’t "suffocating," as Mr. Monge told us earlier.

It would be great if Rawlings could Air Condition their factory, provide long lunch breaks, pay their workers more money, and even design a baseball that didn’t require the careful stitching that pains those who make them. But, this would mean baseballs would cost significantly more money, which means we would have to pay more to attend games and MLB would probably use fewer balls per game, meaning Rawlings would sell fewer baseballs. So, why should Rawlings upgrade the conditions in their factory if they’re doing fine now, and have enough workers to produce all the baseballs they need?

Finally, I haven’t even touched a few basic economic points. That is, the money these workers make is spent in Costa Rica, likely at a market or other Costa Rican-owned business, which means that another Costa Rican is making a better living each time Rawlings makes a baseball. So, even though Rawlings doesn’t pay taxes to Costa Rica – because, if Costa Rica demanded they did, they would simply move to a country where it was cheaper for them to do business – they’re improving the country’s economy.

Again, I encourage you to do your own research, read the article, and leave any comments or email me. However, if you’re going to leave a comment telling me I’m flat out wrong, tell me why and back it up. Thanks for reading.

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3 Comments

Maybe you miss this point: “So, if Rawlings would double the workers’ wages so they could live with a modicum of decency, it would add just 28 cents to the direct cost to sew the professional baseball.

Under this scenario of decency, the direct cost to sew the ball would now be 56 cents, or just over three percent of the ball’s retail price [$0.56 ÷ $16.99 = 0.03296]. It would be quite possible to do this without bankrupting Major League Baseball, or the Rawlings Company.”

As a project engineer for Rawlings in 1986-1989 I was charged with researching countries in the Carribean to establish a new baseball sewing factory. At the time the Haitian factory was having difficulty providing a steady flow of baseballs due to the political unrest. The top three countries we chose from were Honduras, Dominican Republic and Costa Rica. No one from myself up to Harry Figgie who owned Rawlings at the time, felt we were looking for a place to take advantage of anyone. We chose Costa Rica and Turrialba as the locals were very excited to have job opportunities beyond the existing agricultural jobs.

I would like to address a few of the concerns.

1. The wage comparison is ridiculous. I remember looking at the profit margins of Rawlings products at that time. The baseball segment of the business (balls only) lost 10% annually. They were losing money on balls sold to MLB in order to market the name. To say the Costa Ricans wages have not improved in 20+ years is incorrect. When we started there the pay was $0.70/ hour which was the national average. This was over double the wages that they paid in Haiti at the time.

2. We thought of sourcing this product complete from Korea or Tiawan where we received other products from at that time. If we had, would the working conditions in those countries be a concern. It seems to me that we are more concerned about Costa Ricans as it is currently a favorite american vacation destination. Are we feeling guilty about exploiting this beautiful country and the people for tourism?

3. As for the carpal tunnel health issue. I was not aware while working at the Haitian factory that anyone was having health issues. Looking back on this I imagine they said nothing as there were no other jobs to be had. These were some of the poorest people in the world, but those working at Rawlings Haiti at least had an income. In the 1980’s Rawlings was paying consultants to develop an automatic sewing machine to eliminate the manual labor to sew balls. This is a difficult task in trying to meet the quality level required by MLB. The stitches cannot be twisted or inconsistent in any manner as the balls must be identical in feel. MLB would probably have to accept a variation of the ball to allow the process to be automated, thus eliminating the carpal tunnel health problems.

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